Category Archives: Shopping Experience

A New Era in Food Retail?

While possibly making less of a splash than the Amazon-Whole Foods deal,  Lindl US opened a new store in Virginia Beach, VA, signifying the beginning of what many have termed a new era in food retail.

According to a SupermarketNews article, hundreds of shoppers were waiting in a line that circled the parking lot early Thursday morning waiting for Lidl US to open the doors.

The big splash and anticipated disruption to the industry may be based on a number of factors, two of which truly stand out:

  1. Lindl US is committed to offering the lowest prices. “We will beat the best prices in the market,” Brendan Proctor, CEO says.
  2. Lindl US is basing decisions on the voice-of-the-customer. “It’s not about whether our model works in a market,” Proctor said during an interview. “It’s about what we have to do to adapt to the market.”

As they say, time will tell…

Artificial Intelligence Driving Faster Shopping Trips?

As you most likely are aware, Instacart provides shopping and home delivery in a variety of stores.

In an ongoing effort to generate more precise shopping trips — i.e., a faster way of shopping for its employees, who are shopping on behalf of customers — the San Francisco-based company has been testing various ways to determine how people might most efficiently shop for items on a list, ranging from:

  • an alphabetical list
  • a route-based approach
  • an artificial intelligence (AI) approach that uses data from the company’s most efficient shoppers to predict a sequence of picks that would be the most efficient

The article states that people are using AI to solve hard problems more and more… and the algorithms used for more traditional problem solving are not so different from those that can determine how a human would pick-up specified items in a store. In fact, Instacart is able to “guess” the next item a shopper will pick 60% of the time with the AI solution!

“It’s not 95%,” said Jeremy Stanley, VP of data science at Instacart. “But there’s room for variance and error. When we look at the overall sequence it mimics what the shopper does very closely, and usually only reverses a few items per trip.”

Might there be an application for using this AI approach for you and me to enhance our food shopping experience?

If so, how might retailers view this developing use of technology, considering it might make shoppers less susceptible to impulse buying because they will do less wandering through the aisles?

Service v Price in Supermarkets?

Various articles and reports are consistent: supermarket shoppers want more convenience and better service!

One SupermarketNews article reported how consumer demand for service impacted operations at Meijer and the curbside pickup option it launched in some stores in 2015. The article quotes Peter Whitsett, EVP of merchandising and marketing at Meijer, “…[data] has put a spotlight on the huge demand for convenience, and the challenge for the big retailer to wrestle it economically. As retailers we’ve done a reasonably good job of managing price for products, but what we’re learning to do is managing price for service.”

The piece goes on to explain that Meijer assumed curbside pick-up would primarily serve for fill-in trips, but the company soon realized they “were 180 degrees wrong. Customers said ‘do all my shopping for me.’”

Similarly, Euromonitor International, a world leader in strategic market research, published a white paper “The New Definition of Convenience in Retail,” which indicates that, “Thanks to time-pressed consumers, the need for convenience is paramount and retailers, in all channels, are deploying tactics to get consumers what they want as conveniently as possible.”

Of course, the convenience of online shopping and grocery delivery means different things to different people. For urbanites, many of whom opt to forgo car ownership, transportation to and from the supermarket might be the key issue. Yet for others, as noted above, time might be the driving force.

So, what does this mean for supermarkets?

First, as noted by Meijer’s Mr. Whitsett, supermarkets will need to go beyond managing price and find ways to streamline and improve the work processes for providing added services and convenience.

Secondly, online shopping is poised to become a bigger part of the overall grocery shopping equation going forward, and grocery providers must find ways to compete in this arena – against the likes of Amazon and Walmart, this will not be an easy task!

As noted in an article posted on fooddive.com, “Grocery retail value should be re-framed to emphasize non-price factors such as freshness, quality, customer service and the shopping experience. 2017 could become the year when retailers stop primarily selling products and instead start selling services, solutions, and quite possibly stellar shopping experiences.”

In-store v. On-line Shopping?

33% of all grocery shoppers will shop online this year, according to a recent article posted on retailcustomerexperience.com, which shared data from the 2017 Grocery eCommerce Forecast from Unata and in partnership with Brick Meets Click.

The article notes that ‘egrocery’ is gaining greater consumer attention and 31 percent of shoppers are likely to order online, up from 19 percent last year.

The article also states that seventy-five-percent of shoppers will switch grocers if there is a better shopping experience to be had, and sixty-eight percent of shoppers who had shopped online the previous year are “somewhat” or “very” likely to switch to a grocer offering a better online shopping experience.

However, when looking at retail in total, a Modern Consumer survey shows that fifty-six percent of U.S. consumers prefer a brick and mortar shopping channel, and 93 percent of customer journeys involve multiple channels. The survey, which polled 1,000 U.S. shoppers, also revealed that over seventy-percent browse for products online before buying in a physical store, and only 10 percent of shoppers mainly shop online.

So while it seems that shoppers in general lean more toward the in-store buying experience, many more leverage on-line shopping in advance and an increasing number of grocery shoppers are trending toward the on-line experience, at least some of the time.

“Quick” Customer Experience Analysis

As you most likely know, “Omnichannel” refers to a type of retail that integrates the different methods of shopping available to consumers (i.e., online, in-store, phone…).

While some say the concept is just a fancier way of describing cross-channel sales, others profess that “Omnichannel” goes further to encompass the continuity of the shopping or customer experience (CX).

To further illustrate this perspective, Todd Leach
VP, Client Insights at Service Management Group (SMG), an organization that focuses on customer and employee experience, writes that Omnichannel is changing consumer expectations and, in one of his blog posts, suggests that “speed” is high on the expectation list.

“Above all else, speed means seamless,” Leach says. “…and the idea of seamless is the root of an Omnichannel experience. Customer information must be available across multiple touch points throughout the customer journey to help make interactions with your brand both efficient and effective. Remembering a customer’s most-purchased items makes checkout a breeze…  a push notification lets them open your app when they come near a store… one-click check-out saves customers from having to give the same information over and over again. These small details make a huge difference in a smooth and efficient customer experience—and that translates to a favorable brand perception and a boost in customer loyalty.”

It seems the online and in-store experiences are merging to better serve customers. The question is, will this ongoing evolution and the associated impact on the customer experience also drive customer loyalty?

 

Employee Engagement Might Be the Key Differentiator for Lidl

Based on statistics published by smallbusiness.chron.com,  employee turnover averages 100 percent in the grocery industry. Cashiers, order fillers and stock clerks have the highest turnover rates, and the cost of replacing just one supermarket cashier is at least $3,637.

But more troubling than the cost, this turnover has a negative impact on the customer experience.

This perspective is consistent with information shared recently on fooddive.com, which states, “Never mind store designs, or prices, or any of the other issues potential competitors have been concerned about: While those issues are all important, so are the ways employees are treated… retaining employees helps to build a cohesive team and a solid shopping experience.

The article goes on to cite the rapid growth of German grocery chain Lidl, whose accelerated U.S. expansion is making many take notice. The grocery chain’s first 20 stores will open this summer in Virginia, North Carolina and South Carolina.

But along the lines of engaging employees, the chain has a plan to attract and retain the best talent by offering one of the most generous benefits and compensation packages in the industry. “The program is designed to ensure that Lidl U.S. employees are recognized and rewarded for their talents, feel valued for their contributions and are motivated to continue to grow their careers with us,” the article said.

Store associates will receive starting salaries of $12 per hour, plus benefits, according to a Lidl press release.  Possibly more important than the robust pay rate is the robust benefits plan, which includes medical, dental and vision insurance with flexible spending accounts, a 401(k) and retirement plan with employer contribution, life insurance, disability insurance, an employee assistance program, paid time off, time off for volunteering, commuter benefits and company sponsored social and fitness events.

Clearly Lidl leadership has a strong appreciation for its workforce and values the concept of employee engagement. If the correlation between employee engagement and customer satisfaction proves true, which we believe it will, it will be interesting to see what happens over the course of 2017, during which time Lidl plans to open 100 U.S. stores.

The Experience Economy?

Continuing with our previous post’s topic of the “shopping experience,” a recent SupermarketNews article referenced an emerging trend called the “Experience Economy.”

According to the article, for a growing number of consumers it is simply not enough to provide competitive pricing, selection, and convenience. Instead, the article suggests, individuals are now seeking “memories” when shopping, which can come in the form of in-store education, additional services, entertainment, or other offerings that engage shoppers.

To simplify the planning process, it is recommended that supermarkets focus on four “quadrants” to enhance the shopping experience:

Entertainment. Live engagement with shoppers — such as cooking and pairing demonstrations, as well as wine and beer samplings.

Education. Examples of this could include in-store cooking classes, “stories” behind the sourcing and production of products, and meal ideas.

Esthetic. (spelled with an “e”) In-store amenities such as restaurants, wine bars, and cafés.

Escapism. Tasting new cuisine and flavors can mentally whisk shoppers off to new locales or inspire them to experiment with new ingredients.

Read the full article… 

Shopping Experience & Center Store Growth

An AMG Strategic Advisors report defines “Center Store” as: Packaged Food, Beverages, Health & Beauty Care, General Merchandise, and Home Care.

Industry insiders say that center store sales have declined over the past several years.

However, a recent SupermarketNews article shares some interesting perspectives on this issue; and while the piece acknowledges the fact that growing center store sales is difficult, it also suggests a simple approach to solving the problem.

The article quoted Scott Lewis, VP, operations, at Harmon City Inc. , who said, “The answer [to growing center store sales…] is focusing on the shopper experience.”

“One benefit of being an independent grocer is the ability to react quickly to new consumers and trends. It’s hard to go to Amazon and browse for a new product — but it’s easy to do in a store. We try to create a treasure hunt in our stores where you’re going to find something new in those center store aisles. That’s what people are looking for in their shopping experience.”

The article also suggests pairing like products with their fresh counterparts as another method for enhancing the shopping experience and, in so doing, growing center store sales.

Read the full article…

Supermarkets of the Future Fast Approaching!

Several past posts have shared details about radical new changes that are being tested by various supermarket chains.

Well, the trend seems to be continuing according to a recent NY Post article, which gives the scoop on Amazon’s latest innovation: a two-story, automated grocery store in which a staff of robots on the floor upstairs grabs and bags items for shoppers below!

The “futuristic prototype” is based on the recently unveiled “Amazon Go” convenience store, “with a bigger layout that could span anywhere between 10,000 and 40,000 square feet.”

The article goes on to explain that Amazon’s plan is to stock these bigger stores with items people prefer to see before buying. In addition, these bigger stores are expected to operate with fewer  employees – possibly as few as 3 to 10 workers per shift!

Read the full story… 

On-line Grocery Seen as Gaining Traction in 2017 & Will Require New Process Imrpovement

A recent SupermarketNews article predicts that on-line grocery shopping will continue to gain traction again this year.

According to the article, consumers and food retailers are becoming more comfortable with the concept of shopping for groceries via the Internet.

“The rate of acceleration of change is increasing drastically,” said Bill Bishop, chief architect of Brick Meets Click. “We sense 2017 is going to be a year of major change.”

The article went on to site research indicatiing that the number of active users of online grocery — those who have ordered groceries online at least once in the last 30 days — nearly doubled from 11% of households in 2013 to 21% of households in 2015, and he expects that proportion to have doubled again since then.

Key factors driving the growth include:

  • Increasing availability
  • Diversity of features available as new players enter the market with a range of alternatives for consumers, such as click-and-collect delivery options and a variety of product assortments
  • Online grocery might also be getting more affordable

It was also noted that an increasing number of major supermarket chains are driving the trend toward on-line shopping, and that the entire industry will need to master new protocols and work processes to optimize efficiency.